Regulation allows potential creditors access to medical records
On the Money
From the April 7, 2006 print edition
The last time you applied for a loan, the fact you had measles at age 9 probably didn’t enter your mind. Likewise, the application didn’t ask about your plans to repair that pesky left knee meniscus tear.
Nevertheless, a new federal rule that went into effect April 1 — Regulation FF — grants exceptions that allow creditors to obtain or use medical information for determining credit-worthiness. Although limited to circumstances that creditors believe are “necessary and appropriate,” they may use certain health information as part of their evaluation process.
Also, the rule allows creditors to share medical information with affiliates in certain situations.
The Fair Credit Reporting Act (FCRA), defines “medical information” as information or data, whether oral or recorded, in any form or medium, created by or derived from a health care provider or the consumer that relates to 1) the past, present or future physical, mental, behavioral health or condition of an individual; 2) health care provided to an individual; or 3) the payment for the provision of health care to an individual.
Under the FCRA, “medical information” doesn’t include:
- Age or gender of the consumer.
- Demographic information about the consumer.
- Any other information about a consumer that doesn’t relate to the physical, mental, behavioral health or condition of a consumer, including the existence or value of an insurance policy.Under Regulation FF, it’s acceptable for a creditor to receive unsolicited medical information. However, the creditor may use that information only to the extent provided by the exceptions in the regulation.
The “financial information exception” contains a three-part test:
- The information must be the type routinely used in making credit eligibility determinations.
- The creditor must use the information in a manner and to an extent no less favorable than it would use comparable non-medical information in a credit transaction.
- The creditor must not take the consumer’s physical, mental, behavioral health, condition or history, type of treatment or prognosis into account as part of any such determination of credit eligibility.
This test is intended to balance creditors obtaining and using certain medical information about consumers when necessary and appropriate to satisfy prudent underwriting criteria (ensuring that credit is extended in a safe and sound matter), while at the same time restricting the use of medical information for inappropriate purposes.
Given that information tends to develop wings of its own, the rule specifies that medical information may be shared with affiliates if:
- The information is shared in connection with the business of insurance or annuities.
- For any purpose permitted without authorization under the Health Insurance Portability and Accountability Act (HIPAA).
- For any purpose referred to in Section 1179 of HIPAA.
- For any purpose described in Section 502(e) of the Gramm-Leach-Bliley Act.Nevertheless, now that these rules are in effect, borrowers may wish to monitor not just their credit bureau scores, but medical records as well. Not surprisingly, there’s an organization that collects, monitors and provides such information — The Medical Information Bureau (MIB).
The MIB will provide consumers a disclosure once annually without charge. To obtain this free disclosure, call MIB’s toll-free phone number, 866-692-6901.
You’ll be asked to certify, under penalty of perjury, that the information you provide about yourself to request an MIB disclosure is accurate, complete and that you’re the person requesting disclosure. If you haven’t applied for individually underwritten life, health or disability insurance during the preceding seven-year period, MIB may not have a record on you.
Many people consider information about their health to be highly sensitive, deserving of the strongest protection under the law. Long-standing laws in many states and the age-old tradition of doctor-patient privilege have been the mainstay of privacy protection for decades.
HIPAA is designed to protect the appropriate use of medical information. An organization called the Privacy Rights Clearinghouse (www.privacyrights.org) provides useful information.
For more official information regarding the privacy of your personal information, you may wish to explore the U.S. Department of Health and Human Services, Office of Civil Rights, 200 Independence Avenue, S.W., Washington, D.C. 20201; phone, 866-627-7748 and Web site, www.hhs.gov.
Also, contact the U.S. Department of Labor regarding privacy of medical information in the workplace, including your employer’s health and safety files and family-leave records. Contact info is U.S. Department of Labor, 200 Constitution Ave., NW, Washington, DC 20210; phone, 866-487-2365 and Web site, www.dol.gov.
Web links to the 50 states’ DOL offices may be found at www.dol.gov/esa/contacts/state_of.htm.
Contact the Federal Trade Commission to learn about health information collected for employment background checks at www.ftc.gov/bcp/conline/pubs/buspubs/credempl.htm.
Find applications for insurance coverage atwww.ftc.gov/bcp/conline/pubs/buspubs/insurers.htm.
© C. Stephen Guyer for American City Business Journals Inc. All rights reserved.